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Tag: healthcare reform

New Payment Experiments Seek To Find The ‘Sweet Spot’

New payment experiments explore a key issue in the decades-long struggle over US health care spending, which is how to distribute liability for expenses across all market participants, from insurers to providers. The rise and abandonment in the 1990s of capitation payments—lump-sum, per person payments to health care providers to provide all care for a specified individual or group—offers a stark example of how difficult it is for providers to assume meaningful financial responsibility for patient care.

This article chronicles the expansion and decline of the capitation model in the 1990s. We offer lessons learned and assess the extent to which these lessons have been applied in the development of contemporary forms of provider cost sharing, particularly accountable care organizations, which in effect constitute a search for the “sweet spot,” or appropriate place on a spectrum, between providers and payers with respect to the degree of risk they absorb.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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Applying Lean IT to Healthcare

The healthcare sector is going through fundamental technology-enabled changes in the way care is delivered, how providers interact with their patients, and how payments are made. To take advantage of digital technology and create more effective systems that help health professionals deliver better care, providers are moving rapidly toward becoming digital enterprises. For example, they are borrowing lessons from e-commerce leaders on how to acquire and retain patients through data analytics and from manufacturing entities on managing patient throughput and optimizing clinical supply chains. Providers are also leveraging apps on smartphones to engage patients remotely in new ways that improve outcomes, and they are using digital tech­nologies to support clinical decisions and streamline hospital operations. In this way, the adoption of more sophisticated analytics has simplified processes and significantly reduced manual workloads.

The pressure of enabling the digital enterprise is landing squarely on the shoulders of the IT department, and this presents tough challenges in a sector that has traditionally lagged behind others in the adoption of information technology. For example, according to Gartner, IT spending as a portion of revenue is 6.3 percent in banking and financial services and 4.2 percent in healthcare. Despite this history, IT departments are now being asked to deliver the core digital platforms that will enable far-reaching changes for healthcare providers. At the same time, in the spirit of doing more with less, these IT departments are being asked to improve service levels and increase IT efficiency.

IT departments will need to take a comprehensive view of how to meet the demands of all core IT functions rather than undertake discrete initiatives. IT leaders will have to address topics such as IT-infrastructure architecture and services, cybersecurity, advanced analytics and data management, and the rationalization of application port­folios. IT departments must carefully juggle a “two-speed IT infrastructure”—balancing the acceleration of new digital capabilities against the maintenance of legacy systems (see “A two-speed IT architecture for the digital enterprise”).

All this will require a more efficient and effective IT workforce. That’s why the appli­cation of lean principles is one important element for healthcare providers across the globe pursuing digitization.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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House Energy and Commerce Subcommittee on Health Hearing

Chairman Pitts, Ranking Member Pallone and members of the Subcommittee, thank you for the opportunity to testify regarding fiscal priorities in the 114th Congress. As a major driver of federal spending, our health care system must be central to this discussion. I would like to make three main points today regarding the fiscal future of the health care system in the 114th Congress.

First, the expansive spending created by the Affordable Care Act (ACA) will continue to generate fiscal issues for years to come. The ACA was left largely untouched by the Budget Control Act, resulting in unrestrained spending in some of health care’s most expensive programs. Next year Congress should rein in this spending and subject the ACA and Medicaid to cost saving reforms.

Second, making reforms within the exchanges and cutting back on ACA spending will create savings; some of which should be utilized to ensure a sustainable Medicare program for seniors well into the future. In order to preserve Medicare for the next generation, big policy changes must occur, and savings generated through scaling back the excesses of health reform can help pay the way.

Finally, decreasing ACA spending and applying some of these savings to Medicare reform is just part of the fiscal priorities conversation. Any change undertaken should lay a foundation for a more efficient health care system, and the 114th Congress should work to towards that ultimate objective by focusing on achievable goals in the present.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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Why I Oppose Payment Reform

I recently gave the keynote address at the New York State Health Foundation Conference “Payment Reform: Expanding the Playing Field.” This blog post is adapted from those remarks (you can watch the half-hour speech beginning around the eight-minute mark).

I had my epiphany shortly after I announced my departure from the National Academy for State Health Policy (NASHP) about nine months ago. In an effort to help find my successor, I contacted some executive search firms. One firm quoted what they referred to as the “market price.” When I pressed them to tell me how much effort this price represented, they declined to do so. Ultimately, I recommended that NASHP contract with a search firm that charged by the hour.

It was then that I realized that, given the choice between capitation (a fixed fee for the outcome I desired) and fee-for-service (an hourly rate with no accountability for the outcome), I, as a purchaser, chose fee-for-service. Only a hypocrite would go around talking about the importance of payment reform, while secretly conducting business the old way!

Having given the matter some further thought, I present my five reasons for opposing payment reform:

1. The premise of payment reform is flawed.

The major actors in today’s health care system have thrived in the old payment model, which rewards volume: filling beds, making referrals, conducting tests, and the like. We now say we want them to improve population health and clinical outcomes while holding down costs. Different competencies are required to achieve these different objectives. There is no reason to expect that the people and institutions that were successful under the old model are the best people and institutions to charge with carrying out the new model.

 

Read the full article here

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Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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Health Reform and Changes in Health Insurance Coverage in 2014

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Open enrollment under the Affordable Care Act (ACA), the most ambitious attempt to expand health coverage in the United States in decades, began October 1, 2013. The law offers Medicaid eligibility to citizens and qualified legal immigrants with incomes at or below 138% of the federal poverty level in participating states and tax credits for private insurance purchased via marketplaces for persons not eligible for Medicaid who have incomes between 100% and 400% of the federal poverty level.1 The effect of these provisions on insurance coverage and access to care is of critical policy interest.

Preliminary reports from rapid-turnaround surveys have described a decline in the uninsured rate since the fall of 2013, when open enrollment began.2-5 However, numerous factors, including the economy, survey sampling error, and preexisting trends, can affect estimated rates of Americans without insurance. More generally, the systemic changes brought by the ACA pose a particular challenge for identifying the effect of the law, owing to the lack of a control group. Although to date 24 states have not expanded Medicaid, the ACA has major implications for these states, owing to subsidized marketplace coverage, the individual mandate, and a streamlined application process for uninsured persons who were previously eligible for Medicaid.6 An additional question is how quickly any coverage changes will lead to improved access to care.

Our study had two main objectives. We wanted to determine, first, whether the pattern of recent coverage changes is consistent with early effects of the ACA and, second, whether any changes in access to care are yet evident.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.